Pandora.com is pretty cool but in my view Spotify.com blows it away. You have to be ‘invited’ but I don’t think that is a big problem – after all I received an invitation and did nothing special to receive one. In fact all you need to do is invite yourself – http://www.spotify.com/invitation/

Spotify was in Europe for a couple of years before coming to the U.S. in July. There have been many questions on its revenue model which is a mashup of paid subscriptions, ad revenue and display ads (90% of users do not pay) and retail partnerships where music is sold directly to users. John Paul Titlow wrote a good post on the subject back in July – http://rww.to/ngA4sK – and he does note that the company as of that writing was not profitable even with more than 10 million subscribers. Spotify has a goal of having 50 million users within the first year of being live in the U.S.

It suffices to be said that music industry executives are not nearly as enamored of Spotify as are its users. All they can see is the potential loss of revenue. My thoughts and questions are more aligned with creating new sources of revenue and how those new revenue sources would stack up with the declining revenue generated from the sales of singles and albums.

There are several things that make me prefer Spotify over Pandora. At the top of my list is that I like to listen to entire albums and Pandora’s free model precludes you from doing that. Spotify allows you to search for a particular artist and album and immediately it comes up and you can listen to it song by song. There are occasional ad interruptions, but they are not overly frequent and the benefits far outweigh the commercial breaks.

Also on my list is the very user-friendly functionality of the site. Setting up play queues, play lists, syncing with iTunes and other devices are all easy. Pay options allow for the creation of a library, and use ‘anywhere’. The entire experience is good enough that I am even considering opting for one of the pay models.

There’s a ‘Premium’ subscription at $ 9.99/month – advertising free – a bit steep but it also allows you to listen on your mobile device as along with ‘enhanced audio’ and ‘exclusive content’. Also available is a Spotify ‘Unlimited’ subscription for $ 4.99/month which although advertising-free, does not offer Spotify on your mobile device, nor does it offer the enhanced audio or exclusive content. For me the audio quality is very good and I consider myself a bit of an audiophile. I am uncertain of how much better the enhanced audio might be (perhaps Spotify should offer me a ‘free trial’ so I could compare?)

If you like music you should really give Spotify a spin. Yesterday I went to see Steely Dan at the Beacon Theater in New York (they were at the top of their game) and while I was in the office listened to ‘Royal Scam’ (the album they will play this evening) to get primed. It was great and I love it!